Money laundering: Putting banks on the spot – Punch

Acting President, Yemi Osinbajo, wants banks that aid money laundering in the country to be brought to book. He spoke in Abuja, at a recent three-day conference on: Promoting International Cooperation in Combating Illicit Financial Flows and Enhancing Assets Recovery to Foster Sustainable Development in the country. The banks have been operating without restraint, damaging the economy and governance, ultimately. They draw afflatus from a lack of political will of the Nigerian state and its ineffectual institutions that are supposed to regulate them. This worries us even more.

Nigeria is a known corruption haven. The criminality, which over the years has haemorrhaged public treasury, is driven in the main by unscrupulous public officials and their allies in the business world. Presently, shopping malls, commercial farms and private apartments yield billions of stolen cash, readied for laundering, just as the Presidency has undertaken several trips to the United States, Britain and United Arab Emirates, among others, aimed at repatriating Nigeria’s looted assets and entering into Mutual Legal Assistance agreements.

According to Global Financial Integrity, a group based in the US, Nigeria is “the leading source of illicit financial outflow from sub-Saharan Africa.” Using World Bank and IMF data, it claimed that Nigeria lost $182 billion between 2000 and 2009 to illicit capital flight. This was corroborated by the African Union special committee report of 2014, chaired by a former President of South Africa, Thabo Mbeki, which affirmed that out of every $60 billion illicit outflow from Africa, $40 billion came from Nigeria.

But being the face of the state now, Osinbajo ought to be regaling us with practicable policy and punitive drives that will contain money laundering, amid the failure of extant laws in doing so, instead of his seeming protestation. In an attempt to deal with the scourge, the Money Laundering Act 2011 was enacted, and amended in 2012 to strengthen it. The Nigerian Financial Intelligence Unit and the Special Control Unit Against Money Laundering were all set up to reinforce the Economic and Financial Crimes Commission in fighting the abuse.

Through automation, under existing legal mechanism that checkmates money laundering, it is obligatory for banks to alert the EFCC on transactions that fall within the “suspicious thresholds.” The amended Act increased the threshold for individuals from N1 million to N5 million and between N5 million and N10 million for bodies corporate. Similarly, a transfer to, or from a foreign country of cash in excess of $10,000 by an individual, or a corporate body shall be declared to the appropriate authorities. But what is obvious is that the provisions of the law are observed in the breach.

Evidence: a court recently ordered that a total of $153 million siphoned from the Nigerian National Petroleum Corporation and stashed away in four banks be temporarily forfeited to the Federal Government. The amount, valued at about N46 billion in local currency, and allegedly taken away by a former minister, was given to bank executives who covered up the deal. An EFCC investigator, Moses Awolusi, said the illicit deal was hatched in December 2014. Had the law been effective, the perpetrators would have been stopped in their tracks. What is more, no bank executive has been punished.

While sentencing a former Nigerian governor in London for money laundering offence, a Southwark Crown Court judge, Anthony Pitts, said the details of his looting were “simply sensational.” But the funds passed through the banks. The illicit outflows require more than the lamentations from the authorities. Since there are laws to check the abuse, what is required of Aso Rock is to interrogate the system to know why enforcement has woefully failed.

As Akere Muna, the Chairperson of International Anti-Corruption Conference Council, a keynote speaker at the Abuja conference, said, “Handlers of stolen goods are as punishable as the thieves themselves. In certain countries, the handlers even get a more severe punishment than the thieves.” This is a paradigmatic punitive reaction expected of the government if money laundering in Nigeria is to be made a thing of the past. Our long-standing view has always been that the present law be amended to ensure that banks and their officials that connive or collude with suspects are charged together.

Government’s lack of seriousness in tackling money laundering in banks is underlined by the fact that no action has been taken against the bank, which barefacedly allowed the names of four domestic servants to be used to open $15 million accounts on behalf of a politically exposed person in the last administration. Yet, the use of spurious identities to operate bank accounts is clearly in breach of Section 11 (2) of the Anti-Money Laundering Act, which attracts between two and five years’ imprisonment for an individual and a fine of between N10 million and N50 million for a financial institution or corporate body. The fine is even too small for any bank. Therefore, the punishment should be more stringent.

However, clearing this mess will require a tight regulatory control by the Central Bank of Nigeria. We demand that the Chief Executive Officers of errant banks lose their jobs to drive home the point. In the wake of the 2009 sacking of the CEOs of five banks by the then Governor of the CBN, Lamido Sanusi, following mounting toxic debts and corporate governance abuses, those left behind sat up.

Banks hold public trust. This explains why they don’t go unpunished for any infraction they commit in developed democracies. For instance, HSBC, JPMorgan and five others were slammed with fines of £412 million for the Euribor benchmark rate rigging. In the US, seven months after the 2008 global financial meltdown, $150 billion fines were imposed on banks for a broad range of misconduct – money laundering, tax evasion, mortgage fraud, among others − according to aFinancial Timesreport. This, Abuja has to emulate, if the country is to stop the drift.